State Council meeting on Russia’s environmental development for future generations

Vladimir Putin chaired State Council meeting on environmental development of the Russian Federation in the interests of future generations at the Kremlin.

December 27, 2016

15:10

The Kremlin, Moscow

Excerpts from transcript of the State Council
meeting

President of Russia Vladimir Putin: Colleagues, good afternoon,

Our agenda today includes the challenge
of Russia’s gradual transition to a sustainable development model, not simply sustainable
development, but environmentally sustainable development. I want to stress that
we are discussing economic development, but with a focus on environmental
issues.

This issue is crucial, above all, to improving the efficiency of the national economy, on the one hand, and at the same time to improving the quality of life for our people, and achieving the potential of our regions, on the other.

I will remind you that 2017 has been
declared the Year of the Environment, and environmental protection has been
included in the recently approved National Science and Technology Development
Strategy as a priority.

It is clear that this policy is for the long term – for the next 20, 30 years or more. But, unless we start moving, we
will go in circles forever complaining that we do not have enough money to address
the current issues, and we will never get around to strategic issues. We cannot
delay this any longer.

I also want to emphasize that
Russia’s huge, no exaggeration, huge resource potential, is of truly planetary
significance. Our country has huge reserves of fresh water and forests, and great
biodiversity; it serves as an ecological donor for the world, providing it with
nearly 10 percent of its biosphere sustainability.

Back in the early 20th
century, Vladimir Vernadsky warned that the time would come when people would
have to assume responsibility for human, as well as environmental development.
There is no doubt that this time has come. Humanity already owes an enormous
debt to the environment and continues to test its limits, which is affecting
people. Although I would rather not speak about it, I feel compelled to say
that outdoor and indoor air pollution claims the lives of 7 to 8 million people
every year. These are ominous and alarming figures. This has a direct bearing
on our country. In a number of areas, the environmental stress has reached a critical point. This costs our economy up to 6 percent of GDP every year, or up
to 15 percent if we factor in the health costs.

I would like to highlight some of the most urgent environmental issues that need to be addressed as a matter of priority. Achieving drastic reductions in emissions of hazardous substances
into the air, water and soil is a major issue. This can be done by reequipping
industry and implementing the best available technology. A number of big
corporations have already launched environment protection programmes. However,
we are also aware of the fact that not all companies pay due regard to these
issues.

Of course, as I said in the beginning, this requires investment, but we have to understand that
eco-friendly technology is not only a priority but also brings about tangible
economic benefits. I expect the business community to heed my words: the implementation
of this technology should not be delayed. We can no long afford to put these
issues on the back burner. It was decided to roll back some initiatives, as I will explain later, but there will be no further adjustments. Let me add that
implementing the best available technology can serve Russian companies and the economy in general as a powerful incentive for boosting performance and competitiveness.

I would like to call on the ministries and agencies in charge of issuing norms and regulations regarding
such technology: you need to ensure that they are being issued in a timely
manner and taking into account that companies need a reasonable timeframe for implementing them, which means that norms and regulations should be issued well
in advance. Let me reiterate that it is impossible to keep putting this issue
on the back burner.

The situation with hazardous
emissions remains critical. Half of the city population breathes highly
polluted air. Vehicles, both personal and public, contribute 50 to 90 percent.
A significant part of open water is classified as polluted or extremely
polluted. Seven percent of residents have no access to quality drinking water.
Soil condition is worsening in nearly all regions. If we continue to limit the solution
to half-measures and prioritise other objectives, the emissions and greenhouse
gases will reach a critical level by 2050. We understand very well what this
means. This means that we will leave the future generations an environment
unfit for living. Therefore, we must reduce pollution and emissions by at least
50 percent.

Environmental education and awareness is an important area for improvement. So far, the term “environmental
education” has not been fixed by law. Environmental pollution data is scarce
and disappears in various agencies while summary estimates of air pollution are
calculated for major cities of only 12 Russian regions. These obstacles make
the nationwide environmental monitoring difficult, to say nothing about
long-term forecasts. I would like to hear today what you think should be done
to change the situation.

Another important task is treatment of industrial and consumer waste, which now totals over 30 billion tonnes. Rubbish
is disposed without any order and landfills take up almost 48,000 hectares. As you
know, strict rules for the disposal and treatment of household waste have been
introduced by law; however, the effective date has been postponed. I would like
to hear about drafting of necessary documents and what has been done for the public to learn more about this innovation.

I would like the speakers to pay
special attention to processing high-risk waste.

Furthermore, and this is always mentioned
in various statements on this subject and in this year’s Address [to the Federal Assembly] too, individuals and public organisations should be actively
involved in social projects, including the resolution of environmental issues. As I have said, officials should not hide from people in their offices. Obviously,
the public wants and has the right to take part in environmental, educational
and other specific actions aimed at improving the quality of their lives and upgrading their courtyards, parks and squares. I am simply convinced that
confidence in public initiatives, as well as dialogue and partnership with
public organisations are very important for developing a high-level
environmental culture in the country.

I would like to ask Mr Ivanov, chairman
of the Organising Committee for the Year of the Environment in Russia, to take responsibility
for environmental projects with the participation of volunteers, including
those from the Russian Geographical Society (RGS) and other associations.

Colleagues, I have mentioned only
some of the many questions that require our attention. I believe they will be discussed
in other reports and speeches. I am referring to such issues as energy saving, and the preservation of forests, water, unique natural sites and rare flora and fauna species. It is also necessary to carry out energy saving and ecological
recovery programmes at national sites like the Volga River, Lake Baikal, and Lake Teletskoye in Altai.

I would
like to ask the speakers to focus on measures and proposals to improve the situation, which we can and must implement in the near future.

The central issue of the State
Council meeting, Russia’s environmental development in the interests of future
generations, has stirred great interest among scientists and experts, as well
as a wide range of other professionals. In preparation for the report, we
analysed the impact of global environmental issues on Russia’s development and listed some domestic environmental challenges. The report justifies transition
to eco-friendly sustainable development as a national strategic priority.

The wellbeing of the present and future generations can only be ensured by efficient use of natural resources. The idea itself is not new, as Mr President noted in his speech, and originates
from Russia. It was our great fellow countryman, scientist Vladimir Vernadsky,
who introduced the term “sustainable development” almost one hundred years ago.
The concept is clear and simple: humanity cannot exist in opposition to nature since
it is an integral part of nature. We also have to honestly admit that neither
today nor in the foreseeable future we will be able to do without natural
resources. But we must clearly understand the ways to measure our natural
capital. The entire world is looking for a new scale for these measurements. I believe Russia must get ahead of the rest of the world in this task.

Since Adam Smith, natural resources
have been assessed in terms of their degree of involvement in economy. Even
aware of environmental limits of growth, we continue to rate development levels
through standard indicators. One of these key indicators is GDP growth, which
basically only shows the rate at which natural capital is converted into
physical capital, without consideration for the social and environmental impact.
This impact can be negative. I think it would be appropriate to compare this to double-entry bookkeeping, which has been in use since the 15th century.
We can apply it to our topic in the following way: humankind has natural
capital, or liabilities, and human capital, or assets. Our goal is to turn
liabilities into assets with minimal losses, that is, to use natural resources
to increase human capital.

In our report, we have substantiated
the need to add other quantitative indicators beside gross domestic product to reflect sustainable development. We will need to form a system of national
accounts to evaluate the state of the environment and the cost of environmental
benefits. This should be taken into account in strategic planning documents and should allow us to really manage the processes. We believe this planning system
will enhance Russia's role in addressing global environmental issues, as you,
Mr President, said in your speech.

Colleagues, while working on the report, we found it useful to rise to the academic level, because large things
are best seen from a distance. This has helped us to focus systematically on specific issues that are of concern to most people today, starting with the most relevant ones: the quality of air and drinking water, household waste
disposal, mitigation of environmental damage, and preservation of the existing natural
landscapes.

Article 42 of the Russian
Constitution enshrines the right to a healthy environment, reliable information
about its condition, and compensation for the damage done to one’s health or property by environmental violations.

As we see it, there are three main
components, and each requires hard work. The authors of the report have
proposed a package of solutions for attaining this complex goal in the medium
and long term. It includes amendments to existing legislation regulating natural
resources and environmental protection; a multi-level system of incentives; building
clean industry – also through using special marketing tools; a set of measures
for the development of renewable energy sources; new requirements for environmental education; and effective mechanisms for interacting with civil
society. The proposals include large-scale and largely interrelated efforts,
which cannot fit in the so-called simple solutions.

The algorithm of implementing the suggested measures has been presented in detail in the report. I will briefly
touch on the key issues.

First is the need to control air
quality. No tangible reduction in air pollution in industrial cities has been recorded
since 2000. This indicates that we have exhausted the potential of the current
model of controlling ambient air and must look for other approaches.

Such tools exist and here they are.
It has been suggested that we need to estimate the combined influence of all
pollutants in a city, conduct a summary assessment of maximum acceptable emissions
and, based on this, determine the allowable contribution of each pollutant in the standard quality of air in a given residential area. Companies will proceed
from this contribution or quota in drafting specific programmes and making technical
solutions. The goal is to reduce the rates of air pollution in the cities.

It is also necessary to determine traffic
quotas at the same time. Municipal and regional authorities will be responsible
for tracking this. They need to determine the tools to influence this, including,
first of all, ways to develop public transport, transition to environmentally
safe vehicles, and modern city-planning solutions for regulating traffic.

It is easy to determine the efficiency of such air control methods by measuring the reduction in the concentration of harmful substances in the air in residential neighbourhoods.
The existing Roshydromet (Federal Service for Hydrometeorology and Environmental Monitoring) and Rospotrebnadzor (Federal Service for Surveillance on Consumer Rights Protection and Human
Wellbeing) monitoring systems will
provide the necessary data for managerial decisions. The extent of meeting the public demand for fresh air will be the main indicator of the efficiency of these joint efforts and hence, may be considered a sign of steady development.

The report suggests using all these tools. I will list them again: combined
pollution assessment, pollutant concentration quotas, and monitoring of air in residential neighbourhoods as the foundation for managerial decisions on legislative and regulatory acts. This will allow us to face the authorities and industrial enterprises with very practical objectives. I suggest choosing pilot
regions for testing these measures and will say outright that the Chelyabinsk
Region is ready to pioneer this. We hope this will give new impetus to our
development.

In our experience, we often come
across growing public and environmental risks as part of major investment
projects. We believe a complex environmental impact estimate for such projects
at the initial stage of their implementation would allow us to balance business
and public interests. Clear and transparent mechanisms of state environmental review
should make the process easier.

The next problem is the shrinking
land that is supposed to provide for the needs of the current and future
generations. Already a third of the planet’s fertile soil has been lost. In Russia its share is 7 percent. But we all realise that this is not an excuse
for remaining idle. The process of soil loss is accelerating, and an increasing
amount of land is being used for non-cultivating purposes, for manufacturing but
also industrial waste and dumping.

As you said, Mr President, the uncontrolled use of (1st and 2nd class) hazardous waste,
which can be tantamount to chemical weapons, is particularly alarming. Its
disposal should be regulated by special human safety requirements and for preventing possible terrorist threats. We believe high-tech transport control
mechanisms and the best recycling technologies should be introduced in this
area as a priority. I hope Mr Donskoy will highlight this subject in more
detail.

Let me touch upon household waste
briefly, as it cannot be put off any longer. The regions are prepared for the new waste disposal system to various degrees.

The regions are facing this problem
to different extents. The adopted decision to let the regional authorities
decide on when to introduce the new system within a certain transition period meets
the interests of the green economy and is fairly realistic. People must be
prepared to use this system, and it is up to the local authorities to get them
ready.

Another extremely important issue,
in our opinion, is environmental education. It is important to build a firm
attitude to nature in every Russian citizen so that the public understands how
their everyday behaviour can affect the environment. Insufficient environmental
literacy, inability to give an objective assessment to relevant information
facilitates environmental scepticism and, therefore, denial of any progress. We
have seen that. When this happens, many of our fellow citizens lose the ability
to judge environmentally significant data from various sources.

Environment is, above all, knowledge.
We believe that our education system must provide this knowledge as a fundamental rather than secondary subject. Environmentally friendly behaviour must
be instilled by all education programmes, starting from kindergarten. Only then
will it be common to realise one’s personal responsibility for the future where
humankind, which has become a geological force, can continue to progress with
confidence.

Colleagues, in my speech I briefly
and sometimes emotionally outlined the results of the six months of work. I hope that my team managed to articulate the principles that will help us ensure
the sustainable development of Russia for the benefit of present and future
generations. In this regard, I cannot help but quote Vladimir Vernadsky who,
almost a hundred years ago when people only started paying the price for industrialisation, wrote: “A tremendous future is unfolding for humanity if people
can understand that and do not use their intelligence and labour for self-eradication.”

I sincerely hope that we will enter
the Year of the Environment with a common understanding of the tasks and approaches to them in order to accomplish our goals together.

In conclusion, I would like to thank
all the working group members for their contribution here. And Happy New Year!
I wish you good health, prosperity and peace!

I would like to begin with the results of a recent nationwide poll conducted by VCIOM Public Opinion Research Centre, in which almost 45
percent of respondents believe that waste is a major threat to the environment,
so I'll start with that.

Two years ago, a law aimed at resolving
this issue was passed. It provides several key mechanisms. The first is requiring
each region to create a transparent system for solid municipal waste
management. To this end, the regions need to approve territorial waste
treatment arrangements. This document provides a method for the objective
assessment of the accumulated amounts of waste and waste traffic management. Under
the law, the regional authorities have to select a regional operator on a competitive basis.

We realise that the regions are in varying degrees of readiness, and their transition to a new system is only
possible with the full support of the federal government. As an example, I will
cite the preparatory process for regional territorial plans. These documents
have been agreed upon with Rosprirodnadzor [Federal Service for Supervision of Natural Resources] in 82 regions, and 69 have approved them. These results are
due to the fact that Rosprirodnadzor has been working with each region
individually literally on a daily basis.

The next step includes choosing
regional operators and setting rates. The regions should do this with the targeted support and control of our colleagues from the relevant federal agencies
and ministries.

It was decided to move to a new
regulatory system in phases, but, of course, we are not putting this issue on the back burner. First, 12 regions have confirmed their willingness to work under
a new system of regulations beginning in 2017, and they need our support. The second key mechanism of the adopted law has become operational in full. Today,
manufacturers and importers must dispose of the items that have lost their
consumer properties on their own, or pay an environmental fee to the state. In 2017, we plan to collect over 6 billion rubles in environmental fees, and these
funds will be used as subsidies for the pilot regions.

We also plan to gradually enlarge the categories
of goods subject to recycling (at present there are only eight) and set higher
recycling standards. This will generate considerable amounts of money: 300
billion rubles. These funds will be used to subsidise household solid waste
disposal programmes at the regional level.

Obviously, these measures will be successful
only if the required waste processing facilities are created. The first step in this direction will be the launch next year of five pilot recycling plant
construction projects. In order to make waste recycling environmentally
friendly, it is necessary to ensure waste separation and sorting, and we
believe that this is an area that small and medium-sized businesses should move
into.

Unfortunately, at present, in addition to reforming the waste disposal management system, we have to deal with the backlog of problems in this area. To bar illegal waste disposal practices, we
have streamlined the licensing system down the entire waste circulation chain.
A total of 12,000 licences have been issued and licence oversight is ensured.
There are also plans to introduce additional automated waste transport control
systems regardless of hazard categories, including the use of the GLONASS system.
Together with NGOs, in 2017, we will put into operation a public information
system to identify and monitor the elimination of dumpsites – a kind of public control system.

Now regarding accumulated industrial waste.
Over the past four years, we have removed 4 million tonnes of waste in Russia’s
Arctic zone, Siberia, Far East, Caucasus and Volga region, as well as the Baikal nature reserve. However, we understand that considering its scale, the problem requires a systemic solution. We have adopted a corresponding law that
provides for the introduction of a new system: the identification of such sites
and their categorisation in terms of environmental risk. As a result, next year
we will expand the scope of operations, with another 25 polluted territories in 20 regions slated for clean-up.

The aggregate volume of budgetary funding for these projects will exceed 7 billion rubles through 2019. However, budgetary
funds alone are not enough. It is necessary to incentivise private investors to undertake such projects. This may include exemptions in providing tracts of land
cleared of dumpsites and landfills, as well as the implementation of such
projects in lieu of reimbursing the damage caused to the environment.

We believe that the implementation of all of the aforementioned measures will make it possible to significantly improve
recycling standards. At present, the level of solid household waste recycling
is 8 percent. By 2025, it will amount to 40 percent. Naturally, this will also prevent
illegal dumps from popping up.

I am now moving to the second area of the environmental protection reform, namely technological regulation
through the law on the best available technology. This is a comprehensive law
aimed at improving environmental oversight and control, ecological assessment and ecological norm setting and encouraging environmental activities. Each of those
elements is to be implemented stage by stage over a period from 2015 to 2025
with the planning horizon stretching as far as 2035.

For the implementation of the first, the most crucial
stage, it is necessary to single out 300 enterprises in the first environmental
risk category, which account for up to 60 percent of the negative impact on environmental components. Those enterprises will have three years, beginning in 2018, to carry out modernisation programmes. The remaining facilities in the first environmental risk category are to switch to the new system by 2025. For that, a state database of enterprises is being created. Those of them that pose
the highest risk in terms of pollution are being singled out and equipped with
automated control. A system of ecological assessment for the construction and reconstruction of such facilities is also being introduced. As a result, data
on overall emissions, waste dumping and waste disposal volumes will be available
to the general public.

In 2017, to ensure a transition to the best available
technology, all necessary reference books for various economic branches will be
completed. By now, half of such reference books have been approved. There are
24 reference books.

To make those measures more efficient and simpler to implement, we consider it necessary to envisage equipping
enterprises stage by stage with automated emission control devices and issue
comprehensive ecological permissions for new enterprises prior to their
construction. And we suggest moving the state environmental review of investment projects to the stage at which locations for future industrial
enterprises are chosen.

At the same time, we are aware of the fact that
the implementation of this large-scale task will require considerable
investments – around 1.5 percent of the GDP according to preliminary estimates.
Therefore, the law envisages various privileges and economic incentives. In addition, the Russian Foundation for Technological Development will allocate
funds from the federal budget to support the development of enterprises
introducing the best available technology. For enterprises that fail to introduce the best available technology, the fee for emissions and waste
dumping exceeding the required norms will be increased fourfold.

The efficiency of this mechanism has been proven
within the framework of the experience introduced in 2013 of regulating
responsibility for burning petroleum gas at flare facilities. The use of this
mechanism has made it possible to raise petroleum gas recycling from 77 percent
in 2012 to 90 percent this year. Total
investments exceed 200 billion rubles.

I would like to point out that,
despite the fact that the core mechanisms for implementing the best practices
will become effective only in 2019, many large enterprises are already involved
in this work. In particular, together with Rosprirodnadzor, we signed 55
agreements with the companies, and the expected volume of environmental
investments will exceed 130 billion rubles.

In addition, for the purposes of sewage water treatment, the Ministry provides support for implementing 59
investment projects to build and upgrade sewage treatment plants, with a total
private investment of over 125 billion rubles. Once completed, the volume of polluted wastewater discharged into water bodies will decrease by almost 2
cubic kilometres per year.

Over the long term, the transition
to the best practices will ensure not only an increase in the quality of life,
but will also stimulate the machine-building industry to manufacture the latest
equipment, and set the vector for import replacement and localisation of manufacturing facilities, which will ultimately improve the competitiveness of the Russian economy.

Now, with regard to the conservation
of nature sites. The system of protected areas and biodiversity conservation
are the most effective means of wildlife conservation for future generations.
So, our primary goal here is to expand the area of protected nature sites,
taking into account the level of social and economic development of the regions
where they are located. Over the past four years, we have increased the area of ​​protected areas by 14 percent to over 62 million hectares. We will not stop
at that, and plan to create 10 more protected sites next year.

In today's world, specially
protected nature sites are actively becoming incorporated into ecotourism.
Potentially, our parks and reserves can handle about 20 million visitors a year, but the current infrastructure limits this number to 2 million. The state
funds are not enough to create the necessary infrastructure, so next year we
propose introducing a mechanism to attract private funds to create such
infrastructure, including through concession agreements. These mechanisms will
allow us to start implementing pilot projects to promote ecotourism in the Baikal nature area, the Altai Mountains and the Caucasus in 2018, and to triple
the number of tourists to our national parks by 2025.

Targeted programmes are being
implemented with regard to all endangered species, such as the Amur tiger, the Persian and Far Eastern leopard, polar bears, bison, and Przewalski's horse, in order to stabilise and increase their population. We plan to launch more rare
animal programmes, in particular, for the argali, snow leopard and saiga
antelope. Next year, we will, of course, continue to work towards expanding the list of such programmes, including those with the participation of businesses.

In closing, I would like to provide
one more result from the VCIOM poll, which I began with. Responding to a question about the factors positively influencing the environment, our citizens
put state environmental supervision in the first place, followed by punishing
violators of environmental legislation. Since the majority of regional leaders
are present here today, I want to ask you, especially considering our plans for the Year of the Environment, to be responsive to the public request and proceed
from the inevitability of punishment for violations of environmental law. I would ask you to consider our plans for the Year of the Environment
specifically in this manner.

Environmental protection and responsible management are becoming increasingly important public policy
objectives, as the President has just said. Failure to effectively deliver on these objectives undermines national socioeconomic development and makes it
impossible to improve the quality of life. This is an important decision that
will no doubt mobilise government bodies at all levels, as well as society and the business community, providing them with an incentive to work together on making air and water clean, preserving forests, plants and wildlife, making
sure that the landscape around us is not dotted with ugly household and industrial waste dumps.

I would also like to draw your
attention to the fact that our efforts should target not only future
generations, but also improve the health and wellbeing of the country’s current
population. The related figures have already been mentioned.

It is obvious that a number of environmental issues have piled up in Russia, and their number is growing by the year, which not only makes the overall situation worse, but also increases
the price we will end up paying for regenerating the environment. Just like
with an illness, if you neglect it for too long and lose time before beginning
treatment, the recovery will take much longer and will require more effort and resources.

Overall, there is a tight link
between human health and the environment, just as the state of the environment
is determined to a large extent by human impact. All this is intertwined. For this reason, before launching every major project it is important to assess
risks to human health and the environment.

Let me emphasise that the challenging financial and economic situation and unfavourable conditions on international markets with
escalating competition between suppliers of raw materials and energy resources
should not prevent us from modernising polluting industries. These are just excuses.
What we need is to devise emissions and waste production standards that would
guarantee environmental security in specific territories.

The issue of thermal waste utilisation was discussed at a recent meeting
of the Year of the Environment Organising Committee that I chair. Such
technologies have long been used throughout the world, and they have proved to be absolutely safe since in a number of countries such treatment facilities are
located in the middle of large cities, and they do not harm the environment in any way. We are currently planning to have Rostec State Corporation build such
facilities with the support from one of the world’s leaders in the area, the Japanese company Hitachi. For a start, as it has been mentioned today, plans
are in place for four facilities in the Moscow Region and one in Tatarstan.

I would also like to draw your attention, Mr President, to Crimea. A huge amount of waste has accumulated there. Taking into account the growing
tourist flow (which is good), I think there is a need to build a similar
facility in Crimea, at least on the southern coast near Yalta. The present so-called
Gaspra landfill near Ai-Petri, a beautiful locality in Crimea, makes an awful
impression as you look at it from the sea. I have already spoken to Mr Aksyonov
[Head of the Republic of Crimea] regarding the issue, and he is also ready to start planning the construction of exactly this type of a facility on Crimea’s
southern coast.

Speaking generally about the waste treatment industry, including
regulations, control and monitoring, this is being done – take note of this – by 15 federal ministries and 14 federal services and agencies. The number
definitely impedes the elaboration of comprehensive solutions. As they say, too
many cooks spoil the broth.

The next aspect, which is well known, is non-compliance with the environmental and sanitary legislation, as well as gaps in the state
regulation. Everyone has heard of the use of phosphates in different cleaning
and washing substances. Experts estimate that it is those household chemicals
that make up a considerable, if not the largest, share of water reservoir pollution.
They significantly complicate water purification for human needs and serve as a catalyst for uncontrollable growth of some algae that fill up our lakes and rivers. Even our pearl – Lake Baikal – is endangered.

Phosphates have long been banned in Europe. The world’s largest producers are successfully using safe formulas whereas our
producers are still working in the same old way. It turns out, all that is
needed to remedy the situation (we discussed it at the Organising Committee),
is to adopt an amendment to a document which is approved by a Customs Union
commission. The manufacturers of those cleaning and washing detergents have
long been prepared to adapt their production methods.

As for handling highly toxic waste, it
is clear that control must be tightened as much as possible. Law enforcement
and prosecutor’s offices need to be involved in this when necessary. We have
already heard today that these dangerous substances can be compared with
chemical weapons, and this is true since waste directly threatens not only
human health but also life in general.

I also think that all transport
vehicles that carry dangerous substances, waste and debris should be equipped
with GLONASS receivers. We need to monitor waste shipments on the federal level,
not just within regions, because trucks carrying waste travel from region to region: where this dangerous cargo is bound, how it is transported, the final
destination, etc.

Now, a few words about the much
talked about law on the responsible treatment of animals that is now being drafted.
First, it is my conviction that we should not distinguish between pets and wild
animals but create a comprehensive system of preventing people from discarding
animals on the street like toys they are tired of. It’s not just cats and dogs that
are left on the street: the media has reported on abandoned bears, tigers and even crocodiles. We need to support a system of animal shelters and kennels.

Second, I think the laws should be
toughened with respect to traveling circuses, dolphinariums and zoos where
animals are often kept in appalling conditions; and people who use animals to make money by photographing tourists with them, and other abuses. You know what
I’m talking about.

There is another problem. That is
law enforcement. Our experts have noted time and again that environmental
protection legislation is interpreted by the courts inconsistently due to its
comprehensive nature. I believe it is expedient to generalise these practices
and use it as the basis on which to unify the application of environment
protection regulations. The draft instructions include this approach.

In conclusion, I would like to assure you that the Organising Committee for the Year of the Environment will
not ignore even a single environmental issue that troubles our citizens – and these
issues, judging by opinion polls, are a serious concern as has already been
mentioned today. We will support environment protection initiatives spearheaded
by NGOs in every possible way. The Russian Popular Front, the Russian
Geographical Society, the All-Russia School Students’ Movement and various
volunteer organisations have already launched initiatives to this effect. I will
use this opportunity to ask the regional governors to support these kinds of volunteer
movements as well. Without them, officials will never improve the environmental
situation. We should do everything possible to attract the public and these
organisations to the cause.

Thank you for your attention.

Vladimir Putin:
Thank you, Mr Ivanov.

Mr Shokhin, you have the floor.

President of the Russian Union of Industrialists and Entrepreneurs
Alexander Shokhin:
Thank you, Mr President.

In your remarks, you said that you
wished (of course, we would very much like you to be confident) that Russian
companies would not shy away from efforts to improve the environment. I have to say that for companies from the Russian Union of Industrialists and Entrepreneurs (RUIE) and for all leading Russian companies, efforts to mitigate
environmental impact are an integral part of corporate modernisation and investment programmes.

Mr Dubrovsky, as the former Director
General of Magnitogorsk Iron and Steel Works, probably felt that it would be
inappropriate for him to praise the company, but I have to say that over the last five years the company has allocated somewhere in the range of 3.5 to 4
billion rubles to environmental protection initiatives. Novolipetsk Steel
(NLMK) invested 4 billion rubles just this year. One of the major investors in environmental protection is Norilsk Nickel, which allocated over a period of four years and undertook to invest by 2020 some 300 billion rubles. There are
many examples. Let me quote Mr Donskoy, who said that 55 companies have already
signed agreements with the Ministry of Natural Resources and Environment. I think that as we move into the Year of the Environment many more companies will
follow suit.

For many years now, the RUIE has
been proactively promoting responsible business practices aimed at enhancing
the transparency of environment-related data disclosed by industrial
manufacturers. We have developed tools that provide for the voluntary reporting
of sustainable development. On our website we have made the National Registry
of Non-Financial Corporate Reports publicly available. Non-financial reports
are primarily corporate environmental reports drafted as per international
standards and best national practices. We would like all sectors of the Russian
economy to adopt similar practices. We work with the Moscow Stock Exchange,
among others, to obtain voluntary reports from the companies listed on it. All
these initiatives are sure to bear fruit, and have already yielded results.
According to the Ministry of Natural Resources and Environment, annual emission
volumes are declining despite the figures that have been mentioned.

Russian companies support the transition to environmental technical regulations that was launched in 2014 based on the best
available technology. Moreover, together with the Government and the Presidential Executive Office we are contributing to the drafting of this
legislation.

We believe that environmental
regulation, best available technology (BAT) alongside a law on industrial
policy that introduces a number of incentives for the company’s investment
activities, and the launched process of reforming inspection and supervisory activities, create
new opportunities for furthering the effectiveness of the total environmental
protection both nationwide and within Russian companies.

However, we would like the new
legislation to work effectively, so that we should not, as they say in bureaucratic
circles, “move to the right” the introduction of certain regulations. For that
reason it is desirable to assess the workability of certain norms of the existing legislation and to introduce certain amendments that will allow us,
among other things, to enforce it on schedule.

I would like to use an opportunity
and name several directions of such improvement.

First, the standards of environment
quality. This is the key question for the transition to BAT. Drafting such
standards, in our view, should be undoubtedly done with assessing the risks on human health on the basis of sanitary norms and rules, as well as the designated use of territories, and also the necessity to evaluate the quality
of particular components of the environment taking into account the background
natural condition of the land and water territories.

Second, under the new legislation,
emission and discharge sources at BAT facilities should be equipped with
devices for automatic data monitoring and data transfer to the state agencies
before January 1, 2018. The Government’s schedule has the BAT reference books,
listing the substances to be monitored, to be approved before the end of 2017.

Meanwhile, the norms to be monitored are to be set
by mid-2018 whereas the procedure and conditions for issuing new comprehensive
permits on emissions and discharges, listing automatic monitoring requirements,
have not yet been drafted, and the companies will be issued such permits in 2019 through 2025. In this connection, we suggest that the legislation be amended
to ensure step-by-step installation of automatic monitoring devices on pollutant emitters, as part of establishing systems of industrial environmental
control at enterprises.

Mr Donskoy
mentioned that the work would take place in stages in just this way. The first
stage will start with the 300 enterprises classified as most hazardous. We
think this same approach should be used for automatic control instruments too.

Third,
starting from January 1, 2019, legal provisions require environmental expert
evaluation of the materials justifying the granting of new comprehensive
emission permits for actively operating enterprises making the transition to the best available technology. We think that a state environmental reviews should be conducted once when a site is chosen for a planned
enterprise (in this we support the Natural Resources and Environment Ministry,
as the Minister said). Amendments should be made to the law, excluding state
environmental reviews of the materials for comprehensive
environmental permits for already functioning sites. It is important too to reduce the time it takes to conduct state environmental reviews of sites classified as low hazard. This would fit with the overall approach we are
taking to reforming supervision and inspection work and a risk-oriented approach.
We could take this approach in this area.

Fourth,
double classification of waste is another administrative barrier that increases
the burden on companies. Under the current law, each of the more than 4,000
types of waste goes through a double classification process: first in accordance with the environmental legislation (five different hazard level
categories), and second, under the sanitary and epidemiological legislation
(four hazard level categories). In this respect, we propose looking at introducing
a single classification system that would not simply harmonise the two sets of legislation, but also would conform to the requirements of the Basel Convention
on the Control of Transboundary Movements of Hazardous Wastes and Their
Disposal, which Russia ratified more than 20 years ago.

Fifth, is
overburden and host rock in mining for solid minerals. This is a long-running
issue that has yet to be resolved. Overburden and host rock is essentially just
rock that covers ore deposits and are brought to the surface before the mining
operations start. As a rule, they present no danger to the environment. But our
estimates show that this rock accounts for up to 90 percent of all waste, and this is where we get the frightening figures about billions of tonnes of waste
produced in the country every year.

We
therefore think it possible to change the classification system so that inert
non-hazardous materials such as overburden and host rock and enrichment tails
produced in mining operations are not classified as waste.

In conclusion, I want to say that the Russian Union of Industrialists and Entrepreneurs took active part in preparing this State Council meeting. We held
a series of discussions with the Natural Resources and Environment Ministry,
other federal agencies and the working group. Many of our proposals were
examined and some were taken into consideration. We would ask that the final
draft of the presidential instruction issued following the meeting take into
consideration our proposals and we are ready to take part in their
implementation.

I also want
to say that, as part of the Year of the Environment, we are ready to hold a series of public events. In particular, as part of Russian Business Week in March, we will hold a special conference on the environment. Also, in accordance with the priority project to reform inspection and supervisory
activity, we plan to present consolidated business community proposals on systematising, reducing in number, and updating mandatory environmental
requirements.

I therefore
want to say once more that we are sure that Russian companies will get involved
in this work and that the year will produce new positive results.

Thank you.

<…>

Vladimir Putin: In closing, I would like to say the following.

The subject that we are discussing today is not simply
politically expedient and fashionable. It is truly extremely important, both
for people’s health and the nation’s economic development.

Yes, investing in modern equipment that ensures high environmental standards always means a lot
of spending at the initial stage, but you know well that the introduction of environmentally clean modern equipment should eventually enhance labour
productivity, because this is modern high-tech equipment, and this represents
the main trends in the development of our industry and economy.

In this context I would like to note the responsibility of the state and the business community.
It would be wrong if the decisions required for moving down the road we are
discussing today depended on people who drink clean water and live in a good
environment, while large teams of workers and everything around them exists and moves around in terrible ecological conditions. This is absolutely
inadmissible. I would like to draw the attention of representatives of the business community, as well as regional and federal authorities to this fact.

Needless to say, we
should act with extreme caution so as not to destroy the economy, not to act
like an elephant in a china shop, not to demand the impossible. All decisions
must be thoroughly considered and adopted in a timely matter. We must move
along this road not in fits and starts, but steadily. If we do not do this, we
will get what I mentioned at the beginning of my opening remarks: by the 2050 we
will have to deal with consequences that will be hard or impossible in some
places to reverse.

I would like to motivate you and all of us to take part in this joint work that is extremely
important for our country. Thank you very much for attending today’s meeting. I am grateful for the efforts of the working group to prepare it.